Rising Interest Rates...What It Means.

If mortgage experts agree on nothing else, they at least agree that interest rates will keep rising. The big questions: When? By how much?

The Federal Reserve has been buying bonds, supporting low interest rates, in an effort to bolster the economy. But with the economy slowly improving, the Fed's actions seem likely to end before long. This summer, rates jumped. Now they are hovering around 4.5 percent and are expected to rise further as the economy picks up and the Fed withdraws its support.

Each increase of half a percentage point adds about $25 to $30 a month to the payment for a $100,000 mortgage. It is estimated that rising mortgage rates plus rising home prices have pushed the typical mortgage payment about 25 percent higher.

If you are thinking of buying, you are likely not going to see a better period of interest rates than right now. Rates are bouncing around and I predict they will rise above 5% next year.